Jumbo Loans

Jumbo LoanIn the United States, a jumbo mortgage is a loan that may have high credit quality with an amount that is above conventional conforming loan limit set by (FHFA-Federal Housing Finance Agency).  Fannie Mae and Freddie Mac are restricted by law to purchase single family mortgages with balances below a specific amount.   Therefore, jumbo  loans are not eligible to be purchased, guaranteed or securitized by Fannie or Freddie.  Fannie Mae (FNMA) and Freddie Mac (FHLMC) are large agencies that purchase the bulk of U.S. residential mortgages from banks and other lenders, allowing them to free up liquidity to lend more mortgages.

In general, the interest rates for a jumbo loan are higher than a conventional conforming mortgage even with strong credit due to their larger size.  Should a borrower default on a jumbo loan, it is typically harder and takes longer to liquidate thus the requirement for a higher down payment on such loans.

As of 2010, the conforming loan limit for most of the United States was $417,000 except for Alaska, Hawaii, Guam, and the U.S. Virgin Islands where the limit was $625,500.  This means anything above these limits would be considered a jumbo loan.

For a personalized evaluation and approval, call 512.740.0807.